Treasury knew APD rise would not help climate change, says Tourism Alliance

The Government has doubled Air Passenger Duty knowing it would not help to prevent climate change, according to lobbying body the Tourism Alliance.

It says travellers are now paying five times their carbon cost since the increase at the beginning of this month.

The Tourism Alliance believes a far move effective way to reduce aviation-related carbon emissions would be for the Government to provide increased funding for UK domestic marketing.

Research by the Tourism Alliance and VisitBritain suggests that spending just £150m on domestic tourism marketing would encourage enough people to substitute overseas holidays for domestic holidays to save 1 million tonnes CO2 in aviation emissions.

Earlier this month, the Government claimed that doubling APD would deliver carbon savings of O.3m tonnes of carbon (MtC) a year by 2010/11 – equivalent to about 1m tonnes of CO2.

But Tourism Alliance policy director Kurt Janson said closer analysis of the figures show that travellers are being asked to pay £1bn for no appreciable environmental gain.

“And the Treasury must have realised this,” he said.

“DEFRA figures show that aviation in the UK (domestic and international) generates about 37 million tonnes of CO2 per annum. This is about 6.5% of the UK’s total carbon emissions of 597m tonnes. Therefore, according to the Treasury’s analysis, the doubling of APD will reduce total UK emissions by a minute 0.2%.

“The 1m tonne reduction in CO2 emissions will be gained at a cost of £1bn to travellers. This means that passengers are paying £1000 for every tonne of CO2. Compare this to the market cost of one tonne of CO2 (about £10) and you can see that increasing APD is a hugely inefficient way to reduce CO2 emissions – the public are being taxed £1,000m to prevent £10m of pollution. An overpayment of £990m (99% of the entire tax).”

He said at a cost of £10 tonne, the offsetting cost of the 37m tonnes of CO2 produced by aviation is about £370m per annum.
Comparing this to the £1bn per year being paid by travellers before the increase, he said they were already paying some 2.5 times their carbon cost.

“The new rates of APD mean that travellers are paying five times their carbon cost.

“Another way to look at it is that just £1 in every £5 of the new APD rates would be needed to offset total UK air travel carbon emissions through the existing carbon market.

“However, as APD goes directly into Government consolidated revenue and is not hypothecated, it seems that not one penny of APD revenue will be used for this or any other environmental purpose.”

By Bev Fearis